The TRUTH:

Gateway (former Beifus site)The granting of a $200,000/yr. PILOT for The Gateway was perhaps the largest use of taxpayer dollars for the benefit of Alex Torpey.

After years and years of a prior administration granting to Beifus every single thing that he requested, e.g, allowing the buffer between the Beifus property and the town pool to be decreased and cutting down trees in that buffer, eliminating the parkingdeck that had originally been proposed and then asking for and obtaining a parking variance, the Beifus problem was then handed to Doug Newman.

After about a year of Beifus still trying to do a deal with an insurance co. that had started under the Calabrese administration, Beifus declared bankruptcy. The bank holding the mortgage on the Beifus property then foreclosed on it. For the next three years, while Doug Newman was in office, there was a drawn-out fight in the courts between the Bank holding the mortgage and the trustee in bankruptcy. Shortly before the end of Doug Newman's term, the court ruled in favor of the bank. The bank put the property up for auction and there were multiple bidders. The developer of The Gateway got the property.

After Alex Torpey took office, negotiations began between the developer and the Village (really Torpey and our Redvelopment Counsel) about the amount of the PILOT to be paid. There is a genuine question as to whether any PILOT should have been granted, since it is a prime piece of property in the central business district, directly across from NJ Transit.

The developer, knowing that Alex Torpey was young and wanted to make a name for himself, lowballed on the PILOT. He offered $175,000 which Alex Torpey was ready to accept. (Bear in mind that the same redevelopment attorney who made a bad deal on the Third and Valley development and the Rescue Squad was involved in The Gateway deal.) The developer told Alex Torpey that he was going to delay the project unless he got his demand. Two trustees persuaded Alex Torpey to get $200,000. This was still an exceptionally small PILOT for a prime piece of property. -Source: "Cramer" on MaplewoodOnline

3rd & ValleyThe developer requested a PILOT of 10% of Total Annual Gross Revenues (AGR.) The first year AGR are estimated to be $5.7 million. 10% of that is an annual service charge for the PILOT of $570,000.

N.J.S.A. 40A:20-10 is the New Jersey statute governing how the annual service charge for PILOTs is to be determined. It provides that the annual service charge can be determined by one of two methods. The first is by a percentage of the AGR, which has a MINIMUM of 10% for housing, with a maximum of 15% in the case of affordable low to moderate housing. Since there are affordable housing units, I am using 15% as a maximum.

Using 15%, the annual service charge for the PILOT would be $855,000. This is a difference of $285,00 from what the developer has in its application.

The other method that a municipality can use to determine the annual service charge for a PILOT is 2% of the Total Project Cost. The application includes an exhibit which shows the estimated total project cost to be $60,223,589. 2% of that would result in an annual service charge of $1,204,471.

The bottom line is that Alex Torpey agreed to grant an annual service charge for the PILOT which is the most favorable to the developer and the least favorable to South Orange.